A central feature of signal transduction downstream of both receptor and oncogenic tyrosine kinases is the Ras-dependent activation of a protein kinase cascade consisting of Raf-1, Mek (MAP kinase kinase) and ERKs (MAP kinases). To study the role of tyrosine kinase activity in the activation of Raf-1, we have examined the properties of p74Raf-1 and oncogenic Src that are necessary for activation of p74Raf-1. We show that in mammalian cells activation of p74Raf-1 by oncogenic Src requires pp60Src to be myristoylated and the ability of p74Raf-1 to interact with p21Ras-GTP. The Ras/Raf interaction is required for p21Ras-GTP to bring p74Raf-1 to the plasma membrane for phosphorylation at tyrosine 340 or 341, probably by membrane-bound pp60Src. When oncogenic Src is expressed with Raf-1, p74Raf-1 is activated 5-fold; however, when co-expressed with oncogenic Ras and Src, Raf-1 is activated 25-fold and this is associated with a further 3-fold increase in tyrosine phosphorylation. Thus, p21Ras-GTP is the limiting component in bringing p74Raf-1 to the plasma membrane for tyrosine phosphorylation. Using mutants of Raf-1 at Tyr340/341, we show that in addition to tyrosine phosphorylation at these sites, there is an additional activation step resulting from p21Ras-GTP recruiting p74Raf-1 to the plasma membrane. Thus, the role of Ras in Raf-1 activation is to bring p74Raf-1 to the plasma membrane for at least two different activation steps.